/ Money

Fee-charging cash machines – do you mind paying?

Cash machine

Personally, I don’t like the thought of being charged to withdraw my money from a cash machine. But what happens if you have little or no choice? Is a fee ever a price worth paying for convenience?

Cash machines are currently the most popular method of cash withdrawal in the UK – in 2011 people used ATMs a record 2.87 billion times, withdrawing £19bn in the process.

I’ve been fortunate enough to have always lived in places where there’s access to free-to-use cash machines, but that’s obviously not the case for everyone.

I’m well aware that people who live in the most remote parts of the country can be left with little or no choice but to pay a fee at ATMs. This is often where banks have closed branches and private cash machine operators have decided it’s not viable to maintain a free-to-use one. However, our snapshot survey of cash machines has found that there are even so-called ‘cash machine deserts’ in densely-populated residential areas in London.

Cash machine charges in motorway service stations

Then there are the motorway stations. According to Link (which co-ordinates the ATM network) there are 328 fee-charging cash machines in British motorway service stations, compared to only 18 free-to-use ones. That means that just six of the 98 service stations in England, Scotland and Wales have a free-to-use ATM in their main building.

However, there are less obvious ways to avoid paying a fee. Just under a quarter of the service stations with fee-charging machines in their main building have petrol stations with free-to-use ATMs on the same site. And some also have shops offering cashback.

The cost of convenience when it comes to cash

When we asked Which? members about ATMs, almost all said they resented being charged to withdraw money. Three quarters refuse to use fee-charging cash machines on principle, while nine in ten would rather wait or walk further to find a free cash machine.

While I’ll do almost anything I can to avoid paying a fee to access my money, many people can’t or don’t want to walk an extra five or ten minutes more. And for those withdrawing small amounts of money, a charge of £1.73 (the current average) can make up a significant percentage of a transaction. Plus, this all adds up over time.

That’s why we think banks and private cash machine operators need to keep working together to give people more chance to access their cash for free, and ensure they’re not trapped in areas where the only option is to pay.

Do you use fee-charging cash machines, or do you do everything you can not to pay?

What do you think about fee-charging cash machines?

I resent paying a fee (90%, 622 Votes)

It depends on how much the charge is (8%, 54 Votes)

I'm happy to pay a fee to withdraw my cash (2%, 13 Votes)

Total Voters: 695

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Comments
Profile photo of wavechange
Member

I would not use a machine that charges unless I was desperate, and that has not happened yet.

I live 0.7 mile from Tesco which has three free machines and about 1.5 miles from NatWest and HSBC machines. It’s more of a challenge when away from home, but if necessary I conserve cash and use cards. When on holiday, I take a cheque book too.

Profile photo of NFH
Member

I don’t see why anyone needs to pay a fee to withdraw cash. If you’ve run out of cash and there are no fee-free cash machines nearby, simply pay with a card instead. In 99% of cases, there will be no charge to the consumer, only a fee absorbed by the retailer.

Profile photo of malcolm r
Member

If my bank operated the machine, I would not expect a fee. If I withdraw cash from someone else’s machine then a fee is reasonable – providing and servicing the machine costs money so why should the user not pay something towards the cost?
Having said that, I don’t use cash machines – I withdraw sufficient from my bank, paying generally by credit or debit card or cheque.

Profile photo of kathleen
Member

I rarely ever use cash machines. I find it more convenient to get cash back at supermarkets or M&S. I have been told that banks charge shops for counting the cash they pay in so many shops are more than happy to give customers cash back. It would appear that it saves them money. However, I have relatives who used to work for a bank and they pointed out that machines have to be serviced and that costs money.

Profile photo of wavechange
Member

Here is link to the Link system of free ATMs:
http://www.link.co.uk/ATMLocator/Pages/ATMLocator.aspx

Profile photo of Angus Farquhar
Member

I honestly don’t have a problem with paying a fee to use a cash machine when they are offering extra convenience. The machines are run by companies and placed for convenience where banks have failed to step in. Banks are never going to be able to provide the saturation that these machines provide and the companies that run them don’t make money from them in any other way so to get the convenience you have to pay for the privilege. Banks make their money off you in other ways so can afford to offer you a free way to get your cash.
I understand that there is a problem when certain areas are completely devoid of bank cash machines, but in all other situations I am perfectly happy to pay for the chance to get cash in a situation where otherwise I might not have been able to.
As for the need for cash, sometimes it is essential. A family member recently bought something for me and I had to repay them with cash. I was happy to pay the fee at the motorway service station on the way to see them because I knew I wouldn’t be able to stop at a bank and it was better than not being able to repay their favour for several days.

Profile photo of wavechange
Member

Good points Angus. Though I regularly stop at motorway services I avoid eating there. I set off later than planned on a long drive after Christmas and was very relieved to be able to buy a meal, even though the price was high. I might be glad of a cash machine in a motorway services area one day, even if I have to pay to use it.

Perhaps the answer is for more retailers to offer ‘cash back’ services in areas without free ATMs.

Profile photo of carol croft
Member

No fees should be charged.
The banks have ‘groomed’ us all like a drug pusher with ‘free’ access to our own cash.
Now the banks demand payment for a service?
Banking is not a free market, we consumers have no real choice.

Profile photo of Angus Farquhar
Member

That would be an issue for me if it were the banks charging for using the machines, but these ATMs are operated by independent companies, not the banks so blaming the banks isn’t really fair.

Profile photo of carol croft
Member

Gee Angus, I think you made your view clear on this issue. I on the other hand I have offered a explanation of how we could view the very same issue in the context of the way we have all ended up beholden to the banking oligopoly.

Member
R.Ratnaraj says:
31 August 2015

Dear
Good comments but in my expeariance went to one bank i have to put parking charge of 1.50 to go to bank atm, another occation i been booked 30 pounds parking ticket to go to bank atm the worse
one i had to pay 150 pounds for claiming the car just to withdraw 10 pounds from high street bank free atm so please think which is better
Many thanks

Profile photo of Patrick Steen
Member

Here’s our graphic showing which motorway service stations have fee-charging cash machines (most):

#Didyouknow just 6 of the 98 service stations in UK have free-to-use cash machines in main building. Our map shows more twitter.com/WhichConvo/sta…

— Which? Conversation (@WhichConvo) January 25, 2013

Profile photo of malcolm r
Member

Carol, in my view Angus is right. If an independent company provides a cash machine for your convenience, and it costs them money to operate, then who is going to pay for it if you don’t? Generally if you use a machine operated by your own bank they don’t charge you.

Profile photo of carol croft
Member

If you are actually interested in my convenience then I would prefer to have a comprehensive network of cash dispensers maintained by the banks paid for by their customers and not have the most vulnerable gouged by more charges. There will soon be a portable bank a/c which will involve all the retail banks contributing in a similar way to fund the required IT infrastructure.

Profile photo of wavechange
Member

Carol

The banks have provided a large number of free cash dispensers via the Link scheme, as I mentioned above, so there is no need to go near your own bank. When criticising companies we sometimes forget that they deserve occasional praise.

Of course, you can keep your money under the mattress if you want, and have instant and convenient access. There is choice, though most would not choose that option.

Profile photo of carol croft
Member

Cash dispensers have never been free. That wouldn’t be a sensible business model now would it?

Profile photo of wavechange
Member

Carol – You made an aggressive statement about the banks, and it’s not just me who thinks it was unjustified. Can you tell us what you are suggesting? Constructive criticism can be useful but just saying something is bad is of little help.

I am well aware that I pay for using ‘free’ ATMs provided by banks because I have a current account with one of them, but I don’t pay per transaction.

Profile photo of carol croft
Member

@ wavechange

What are you not understanding about the points I’ve made?

You don’t like my suggestions – fine but just to be clear – who’s the us that I’m supposed to be justifying myself and my views to?

Profile photo of Patrick Steen
Member

Hi both, let’s try and be kind to one another and respect each other’s views. We can explore why we disagree with each others’ comments in a more polite way. Read our commenting guidelines for more: https://conversation.which.co.uk/commenting-guidelines Thanks

Profile photo of wavechange
Member

I did not know what your suggestions were, Carol. (Your reply to Malcolm was not there when I started my comment to you.) I thought it would be useful if we (the readers) were given more information. You have now suggested a comprehensive network of cash dispensers maintained by banks and paid for by their customers. I guess that you are suggesting that the current network is extended.

Maybe there is need for review but the more cash dispensers that are provided for use without charge to customers, the more that customers will have to pay for the enhanced service. Maybe banks should ask their customers about their service provision.

Profile photo of carol croft
Member

I no longer have a benign view of ‘the banks’. For too long they have made unjustified profits by exploiting a ‘trust legacy’ that they were/are not entitled.
There is a whole generation of younger people in mainly urban areas who’s lives can come to a standstill and even be put in danger by the lack of access to their own money via a cash machine. I’m aware also that I have the relative luxury of time, access etc to put my point of view. I am lucky enough to have lots of options in my life and don’t have to live by eking out my last tenner until I next get paid but appreciate that lots of people do have to perform financial gymnastics to just survive. But those people won’t be posting comments here because they’ll be commuting back from work, feeding their children, getting ready to do shift work or still working.
I do have a jaundiced view of banking but who wouldn’t after the horrors of PPI, endowment mortgages and that’s before the CDSs, Libor etc since 2008.

Profile photo of wavechange
Member

Earlier today I read that the Link network provides 65,500 cash dispensers in the UK. Like most services there are areas that are not well catered for, in the same way that rural areas have no mains gas, local school, libraries, banks, or various other important services.

As has been pointed out, the machines that charge a transaction fee are independently operated and have nothing to do with the banks. Maybe some of the banks’ profits could be used to provide additional ATMs.

Profile photo of Patrick Steen
Member

Although banks may not be charging, as is said in the Convo, banks and private cash machine operators do need to work together to make sure there aren’t areas where people don’t have access to a free cashpoint. This is especially true of deprived areas.

Agree with Dave that it can even be hard in London. Shoreditch is one area where it’s almost impossible to find a free one.

Profile photo of malcolm r
Member

As I have never had to use a cash machine – and I do spend cash that I withdraw from my bank – I wonder why it is so essential to have them everywhere when there are other ways of getting cash (may need planning ahead perhaps). Is it the lack of fairly close bank branches or post offices? And why are deprived areas singled out? I accept it is for convenience, but why does that always have to be free when they cost money to operate? A genuine question.

Profile photo of wavechange
Member

I am not sure you are typical, Malcolm. Cash dispensers are very popular, quick and easy to use, and many are available 24/7. My local Post Office closed several years ago due to a retirement and never reopened.

Yes we could charge for using bank ATMs (maybe in return for a little interest on current accounts) but perhaps we should also charge for all services on the basis of cost. NFH is keen that we are charged for using cheques. I don’t know for sure, but withdrawing money from your local bank branch might be a bit more expensive than than using a cash dispenser.

I’m keen on keeping the ‘free’ cash dispenser network and having the option of using others where there is limited demand. I also agree with Patrick’s comment, though I don’t know how banks and private operators can be persuaded to work together in the public interest.

Profile photo of carol croft
Member

Patrick – you said ” banks and private cash machine operators”?
What do you mean by ‘private’?

Profile photo of Patrick Steen
Member

Private cash machines are ones that are not provided/operated by the banks. While some privately operated cash machines do not charge a fee, many do and these are all operated by companies such as Note Machine, Infocash, Cardpoint, YourCash and Bank Machine.

Profile photo of steddyeddy
Member

Unfortunately anything the banks do nowadays has to be looked at carefully as they have become intrinsically more dishonest and unreliable. While I certainly will not pay a fee to withdraw money, I do appreciate that these pay-for-withdrawal machines cost someone, somewhere money to install and maintain (the ones at the rip-off motorway stopovers are of course the most expensive of the lot). However, this is very much a sign of the times in terms of the general reduction of face-to-face bank services provided for the customer. Yes, 30+ years ago you had no option but to go into a bank during their then reduced working hours to withdraw money. The cash machine is certainly more than useful, and while I would never proactively praise a bank after the way they and their seniors have carried on for the past 5+ years, wrecking the economy as they have done, it is, after all, very convenient to be able to roll up to an ATM in the middle of the night and take out some money or to use your mobile phone to pay a bill through mobile banking.

Profile photo of wavechange
Member

I like the image in David’s introduction. I could not read the text until the Conversation featured at the top of the homepage.

Profile photo of malcolm r
Member

Wavechange – I agree I am not likely to be typical, so simply asking the question of those who do use them regularly. I have the view though that we should not expect a service that costs money (independent cash machines for example) to be provided free – who else would pay for them?
I withdraw cash from my bank without any charge.

Profile photo of wavechange
Member

Sorry but I misunderstood your point, Malcolm. In the case of independent cash machines there obviously does need to be a charge. I was referring to the network of machines run by the banks.

Profile photo of John Ward
Member

I suspect the cost to banks of providing counter services for cash withdrawals would far exceed the cost of running their ATM networks and would also be far less convenient for their customers.

Member
Sonny Kosky says:
25 January 2013

I recently withdrew cash from an ATM at an Asda Supermarket using a Asda Mastercard card. It clearly stated above the machine “Free Cash Withdrawals”. If there are restrictions, these should be equally clear, as it states all cards accepted!
I am currently disputing this charge with Santander, my Card issuer.

Profile photo of wavechange
Member

A Mastercard is a credit card, I believe. I have always understood that there is a charge for using credit cards to withdraw cash. Someone has to pay for the service.

There should certainly be a warning that you will be charged a fee for withdrawing money, either on the machine or on the screen, before the transaction takes place.

Profile photo of John Ward
Member

It is essential for users to realise the significant differences between the different cards they deploy. With debit card withdrawals there is usally a screen notice saying “you will not be charged for this transaction” [i.e. a negative advisory]. Because I have always avoided using a credit card to get cash from an ATM, I am not sure whether there is a positive warning [along the lines of “you will be charged £3 immediately plus £1.37 a day for this transaction] when a credit card is used; if not, there should be.

I sympathise with Sonny Kosky. On the face of it the ATM at the Asda store is misleading. I have a suspicion that Santander’s [and Asda’s] get-out card will say something like “our terms and conditions for use of this card, which you signed as having read, understood and accepted, override any other terms and conditions at the point of use purporting to disapply such terms and conditions.

When you withdraw cash from an ATM using a debit card you are only repositioning your own money [and it is transferred immediately]; if you use a credit card you are actually being given an instant loan of the bank’s money [even if your CC account is actually in credit at that point you are still charged interest on the whole amount].

Digressing, I have always wondered why the card that charges you is called a credit card and not a borrowing or debit [or debt, even] card, and why the card that lets you pay for something without using cash isn’t called a buying or payment card.

Profile photo of malcolm r
Member

If you use a credit card to withdraw money (or pay for the lottery for example) your credit card company charges you. So it may not be an ATM charge but a card provider’s charge. M&S (Mastercard) for example charge 2.99% (minimum £3) per transaction and interest is payable from the date of withdrawal – i.e. no interest-free period as you get with non-cash transactions. Presumably they see this effectively as a loan on which they would otherwise not get commission.

Member
richard says:
27 January 2013

I go dog racing – Now I can’t pay for bets by card – I can’t guarantee that I will always have sufficient cash after a run of losses – particularly as it very rare that I have runs of losses. The cash machines are run by the track – So frankly I don’t mind paying a fee to get cash. For shopping I can pay by card or use a ‘free’ – so I do cash macihne

Member
richard says:
27 January 2013

Opps forgot ATM after free.

Member
Nigel Whitfield says:
27 January 2013

In the area where I live (Upper Clapton), we now have a single free cash machine at the Post Office; there used to be one at the petrol station just round the corner, and when I first moved here 20 years ago, there was a branch of Nat West at the end of my road, which also had a machine.

Now there’s just the one free one, with long queues, and if it breaks down, then it’s a fifteen minute walk to find another (or a bus ride).

Given that this is a pretty deprived area, I don’t think that’s terribly helpful at all; I do occasionally use one of the paid for machines, but then I can afford to take out a substantial sum of money, so making the charge a relatively small percentage. Many people don’t have that luxury, and if you can only afford to take out £10, then a charge that amounts to 18.5% is not fair at all – though it is also not that much different to what you’d end up paying in bus fares if you took a trip to the next nearest free cash machine and back.

I don’t know what drove the Shell petrol station to remove the Santander ATM they used to have; I guess it was the pursuit of profits that made Nat West close down our local branch.

The result – an area with one free machine – in my view penalizes the less well off, or those who might not find it as easy to get on a bus or walk to another free machine.

Worth noting also that, while big chain stores might allow you to buy things with a debit card and offer cash back, smaller corner shops often do not; they may not take cards at all. So besides the question of access to cash for people, there is also a potential knock-on effect that may drive people away from smaller shops to the ever-increasing number of ‘metro’ and ‘local’ outlets operated by the big chains.

Member
Phil says:
27 January 2013

I have a Garmin sat nav & it can show the location of petrol stations. When on the motor way I (via my passenger) use this to identify Tesco, Asda (etc) petrol stations, not only will the fuel be cheaper at super markets than at motor way services but so will be the cafes & also the withdrawal of cash from ATMs will be free. The journey may take 20 minutes more than compared to using motor way services but on a tank full of fuel I will have saved a few pounds.

Profile photo of Nick Baker
Member

We’ll be talking about this on the podcast this week….available Wednesday http://www.which.co.uk/podcasts/